Why Centralization Always Fails with Nick Hudson | Bitcoin Infinity Show #196

0:00 Nick, welcome to the Bitcoin Infinity Show. Nice to have you here. Wonderful to be here. Thank you, Knut. Yeah, you haven't been here before and I hardly know you. I got a tip from Efrat that I should interview you. So I will require a long TLDR on Nick Hudson, what you are and what you do. And yeah, what we're going to talk about today. Yeah, old Efrat was one of the first people amongst the COVID skeptic community that I met in real life. When the travel bans were all lifted, we started moving around the world and linking up with all the fellow dissidents that we'd met online for the first time.

0:42 And so we had an enormous amount of fun in Bath, I think it was, in the United Kingdom. That was certainly for me my first sort of trip to meet all these new friends, you know. But the potter history of Nick Hudson is not too complicated until about 2020. So I was, and I still am a private equity investor. I run a couple of private equity funds in Cape Town, South Africa. And I've always been a sort of a student of finance and epistemology, the theory of knowledge. I like reading a lot and I'm a generalist, so I cover a lot of fields and have done so my entire life, which amounts to a fair number of books and so on.

1:33 And I kept to myself, really, I didn't have any kind of significant online presence. Every now and then I'd be invited to speak at some or other conference, but normally on pretty dry financial topics, nothing that would have gotten anybody excited. except perhaps when I was saying something critical of stakeholder capitalism or some other Davos nonsense. And that all changed. I had my annual investor conference coming up in February of 2020. And I thought, oh, you know, one of the questions my investors might ask me is, what's going on with this thing they're calling COVID? You know, is that going to impact the investments. So I thought I better look into this thing and check whether the media is talking nonsense or whether there is something real to it. And I started scratching around for the actual underlying information that was available at the time and very rapidly came to the conclusion that this was nothing more than a media hysteria with a possible niggle in my mind that there might be a grand state overlay to the whole story. In other words, that it was active state propaganda.

2:48 And the reason I came to that conclusion was very simple. This was not a matter of detailed analysis. I noticed that there was propaganda that was being presented as emerging from China, but there was no counteracting or countervailing message from Western intelligence community assets. Nobody was trying to address this purported Chinese propaganda. The falling man videos and all these ridiculous things that we were exposed to in the early months of 2020, they were quite patently fabricated. That's not how people die of respiratory illnesses, walking down the street and then suddenly fall over dead. That doesn't happen and it never happened and nobody ever saw that, but those were clearly frauds at the time.

3:30 And I surmised that the fact that there was apparent Chinese propaganda and no counteracting material meant one of two things. Either that both were in on it or that the Chinese definitely weren't involved and it was Western intelligence communities faking the Chinese propaganda in the first place. And that very rapidly confirmed, you know, to my own degree of satisfaction, that this was very much a Western phenomenon and not a Chinese story. Wuhan, etc., etc., was all showboating. And I took immediate exception to everything that was happening. And when talk of lockdown began, my private observations to investors and to my colleagues began to feel to me to be insufficient.

4:17 I saw the scope for a humanitarian disaster of vast proportions. Lockdowns in Western countries were one thing where you have welfare systems and what do they call that? payment that they were making in the UK that kind of stipend. I've forgotten the name. It starts with an F. But in a country like South Africa, you have no such safety net. So locking down was basically condemning people to complete economic obliteration and possibly even death and morbidity from the economic consequences. I kept on seeing this kind of tagline in the media saying, you know, it's lives versus the economy. And anybody with half a brain knows that that's completely false, that the economy mediates life. And so I became increasingly uncomfortable with the sort of tension between having seen and understood what I'd seen and not speaking out.

5:12 And when I found a couple of like-minded individuals in my own country who for one reason or another had developed similar perspectives, we grouped together and wrote a letter to the state president pointing these things out. And we put some PR agencies to work promoting that material. And this was before the whole machinery of censorship had been set up properly. And so we actually got our articles published in some quite significant newspapers. And I was interviewed on television and on radio in South Africa. That very rapidly became impossible as the censorship dragnet closed down. I would say August of that year, 2020, there'd been a significant tightening and I was the object of quite intense censorship and also smear campaigns at the hands of Western intelligence community assets.

6:04 That little organization that was set up to write that letter was very swiftly put together. We quickly chose the name Pandemics Data and Analytics, which was shortened to Panda. Had I known the association with the creepy world of pedophilia, I would never have chosen the name, but we were in a hurry to get things done. So we launched it. And because it was very early to move, we were one of the first organized groups to mount a resistance to the whole COVID phenomenon, but specifically initially to lockdowns. We developed a following very quickly. Scientists all over the world who were skeptical reached out to make contact with us.

6:48 And we actually put together a very serious scientific advisory board, including people like Scott Atlas and Srinathya Gupta, Martin Kuhldorf, Jay Bhattacharya, Senator Johnson. And yeah, they're not all coming to me right. Of course, yes. Mike Eden. I shouldn't forget him. and the organization then became quite prolific and began to be attacked in western media in particular the times of the uk started coming after us and accusing us of being all manner of things you know anti-vaxxers and the intelligence community assets started writing articles attempting to connect me to nigel farage and david ike who were people i didn't know at all and had no connection with.

7:38 In fact, at that stage, I hadn't even heard of David Icke. So it all got quite creepy. There I was, I thought of myself as just this private equity investor with a slightly different way of approaching the private equity world and maybe a little bit of a contrarian financial approach, but certainly not a person who any intelligence asset would be interested in fabricating stories about. And all of a sudden, this was happening to me. I had my, by profession, I'm also an actuary. which in the United Kingdom and South Africa is a sort of designated professional body and you get a qualification, a fellowship. And so I was a fellow of the Institute and Faculty of Actories in the UK and a fellow of the Actuarial Society of South Africa in South Africa.

8:24 And both of those professional bodies mounted completely fabricated disciplinary attacks against me where, you know, the complainants were people on the inner circle of the whole COVID fraud in South Africa. And in the UK, it was actually, you know, nobody's complaining about completely false things. And those cases continued for, you know, four or more years in both cases and cost me a lot of money to defend. And in the one case, I was not exonerated. They don't exonerate you. They just dropped the case eventually after four years. And in the other one, they're found guilty by a complete kangaroo court in the UK for offensive speech.

9:07 Whereas the original complaints against me had been for, what was it, likening vaccination to rape, which I never did, and for murdering lots of people by encouraging them to think twice about the risk reward profile before taking a vaccine. And the third one was for bringing the actuarial profession into disrepute by questioning the COVID narrative. Those three charges never went anywhere because they were without basis, but they then proceeded to search through my trash cans and look through every aspect of my life to try and find something that they could pin on me. And eventually all they arrived at was five tweets in which I criticized a major South African political figure in quite harsh terms who happened to be a brown person. And for that day, they found me guilty of breaching the professional code of conduct by using offensive speech. That person had never been a complainant. No complaint had ever been made about those tweets, but they found me guilty and sentenced me to a monetary fine, which I duly had to pay.

10:16 And I resigned from the organization, calling them the bunch of pathetic offense Olympic athletes that they were and pointing out that the whole trial had been a sham to try and get me to stop acting as a political dissident. So very serious stuff. Freedom of speech in the UK is completely under attack. And this is just one tiny example of legion ways in which the ability to voice dissent as a private citizen is being threatened. So that's my story. I mean, as the COVID phenomenon began to be displaced by other media narratives, also mostly false, I then found myself looking at the world with a new set of eyes, and I began to read more widely in the deep history of centralization.

11:07 And that's an important part of the story. I think it's one that many people miss. There's 150 year trajectory of Anglo American establishment billionaire bankers promoting and funding institutions that are all about a massive degree of centralization, even at a global scale. And there's a continuum over that 150 period and a continuum of development and a vast institutional infrastructure that has been gradually accruing in the background, largely out of the public eye. And this is all a matter of completely verifiable historical fact.

11:51 And so I've spent a lot of time getting my head around that trajectory, trying to work out who it is who's really behind it, to what extent such events are planned and to what extent they're emergent. Can we attribute them to groups that we can characterize in any particular way? Does it matter whether we can or can't attribute blame or root cause? And thinking a lot about what can be done about it. And I think that's where I intersect with the Bitcoin community. I've got a lot of friends in the Bitcoin community. I myself have no expertise because all my investment energy goes into private equity life.

12:31 But a lot of my talking themes and investment themes are, I think, very compatible with the personal philosophies of a lot of Bitcoin investors. And I think that's how I end up speaking to you today. That's a fantastic introduction. So a couple of thoughts here that come to mind. You said if it's centrally planned or emergent, I find that particular, whatever you call it, dichotomy, like to be super interesting. what we see play like the way i view the world now and what we're seeing playing out is like a crossover between brave new world 1984 and the emperor's new clothes if you read those three books you can see through like pierce the veil of of all the bullshit that's going on but my favorite part of 1984 is the ending of it where where it turns out that there is no big brother. It's just incentives and just people doing these bad things to one another. So in 1984 it's all emergent.

13:37 And I also like to paraphrase what is it, Occam's Razor? Something like never attribute to 5D chess which can be explained by retardation or something like what the original one never attribute malice That that which can be explained by incompetence So what I very curious about is like how much of this is just trickle down stupidity and how much of it is an actual cabal sitting on top in an evil, you know, Dr. Evil type lair and really controlling the world. And what are your thoughts there? What have you found? Okay. Okay. In the first place, I think the important thing to accept is that there will always be emergent features.

14:26 And as long as humans are involved, there will always be planned features. And the emergent events affect the plans and the plans create emergent events. And some of the emergent events are intentional and some of them are accidental. I'm a great student of complexity theory. And when you exert significant pressures on complex systems, so when you perturb them in, let's call them catastrophic ways, the impact of those perturbations has a fundamentally unpredictable component. and that's part of emergence. It's something that isn't planned for. And so I think I would not take anybody seriously if they said it's all emergent and I would not take anybody seriously if they said it was all planned. The question is then, the next question I think that's of interest to you is, okay, well, to the extent that there is planning going on, what are the plans and And who are those plans by?

15:26 And I've pointed to the, I mentioned 150-year history of planning of centralization around the Anglo-American establishment, or some people call it the transatlantic financial complex. The TFC is another term. Why 150 years? It's roughly speaking where you begin to see firm documentary evidence of large-scale investment and mobilization around what was essentially to become institutional socialism. I'm not by any stretch of the imagination denying that there weren't evil bankers involved in the Glorious Revolution and that kind of thing.

16:10 I know. I've read that history, too. I know that those theories are there. I know that there are theories going around about the Illuminati and the Freemasons and various sects of Judaism and the Talmud and, you know, what else? The Black Nobility and the Prite-Boran Guards and so on. Everybody has their… Yeah, sorry for interrupting because I think you said, yeah, this whole COVID skeptic community, of course, intersects with the Bitcoin community. which in itself intersects with the libertarian community. And I think we're all coming from the same thing. There's always a mistrust in institutions, and that's what we all have in common, right?

16:55 Because we're sort of seeing through all of this. And I think for most Bitcoiners and probably most libertarians too, it sort of starts with World War I and the pound going off the gold standard. That's sort of like a starting point. And then there's another tipping point in 1971, of course, where Nixon detaches the dollar from gold completely. And after that is basically all Soviet-style central planning because they have a money printer. So it is centrally planned. But still, so that's why I'm wondering about the wonder, what happened 150 years ago? Because in my mind, it's more like 120 years ago that this whole thing starts.

17:39 In the 19th century, you have the roots being laid for what was eventually to become the movement called Fabian Socialism. The groupings prior to that, funnily enough, had a very important part of that story played out right here where I stand in Cape Town, South Africa. There was a fellow by the name of Lord Milner who was, to a degree, the handmaiden of a mining magnate called Cecil John Rhodes. Rhodes was a miner and politician who had financial backing from the Rothschilds family primarily.

18:20 And he was a great architect of empire for the British. This was his nominal political role and a great monopolizer of the South African gold and diamond mining industries. gold emerged slightly later than diamonds with the discovery of gold in one of the then Transvaal republics, which was separate countries that were occupied by people of Northwestern European origin and French Huguenot origin. They occupied interior provinces of South Africa that had been of no interest to the British, but they then discovered the largest field of gold that had ever been seen in the world. And the British became immediately interested in conquest. And so in addition to having kind of crept their way across the Kimberley diamond fields in the Northern Cape area of South Africa, they then fought a three-year war against the Boers, as they were called in the Anglo-Boer War from 1899 to 1902, gain control of the gold fields of the then Transvaal, a geopolitical entity that no longer exists since the new dispensation in South Africa that's been called Gauteng, which is a bit hard for foreigners to say. It's a much smaller province than the original Transvaal, but the gold fields are, of course, still there, still producing gold. 20, 130 years later, that grouping

19:52 of the Rothschilds, Rhodes, and Milner had massive global political and economic ramifications. At about the same time as all of this, what happened was a political insight was obtained. Power is always seeking control, and control requires centralization. And what these powerful bankers worked out is that if they could persuade people that assets should not be owned by private individuals, but by the state, well, the state was very easily infiltrated by them. And so that effectively meant that the assets would be controlled by them and that they could become phenomenally wealthy if they could get their hands on those assets. And they packaged it all as if it was some kind of workers' movement, socialism, workers and communism, workers of the world unite, something that was going to mean that the assets, instead of being controlled by what they termed capitalists, which means private individuals, would be controlled by the state, and the state would somehow be in the hands of workers. But the mechanisms by which the workers would control the state were never articulated. This was never laid out. And the idea that workers' rights would

21:24 be enshrined and that something other than greed or profit motive would be pursued was never demonstrated in the theory. All that was merely a promise, merely a marketing slogan. And of course, the first efforts to roll out socialism really failed. There was absolute devastating economic consequences because for reasons we can get to if you wish to, very solid intellectual reasons and empirical reasons as well. But the efforts to roll out socialism failed terribly. And they sort of went back to the drawing board and started again. And one of the conclusions they reached is that the sort of Marxist idea of revolutionary socialism that would then lead to the communist state was wrong and that they should abandon the revolutionary approach. And there's an important thing that most people don't understand. People have this idea that communism has been tried somewhere. It really hasn't. Maybe for a couple of weeks, people might have declared something communist. But Marx's idea was that socialism was an intermediate state. So you'd go from a market capitalist economy or a free market economy to a situation where the state owned the assets.

22:40 They would sometimes just quite falsely say this was going to be the proletariat who was owning the asset, but there was no mechanism by which that was the case. The state would own the assets, but that was an intermediate step towards the total dissolution of the state and the community or the communitarian organization or polity would be in charge of the allocation of labor, resources, wealth, and income. So socialism represented the gradual destruction or revolutionary destruction of the market, and then communism would represent the destruction of the state.

23:23 And so although you have the Chinese Communist Party in power, there's nothing communist about China, it's socialist, and it's less socialist now than it was 30 years ago or 50 years ago by a massive degree. And in fact, one of the arguments I make in a presentation I gave recently was that the West is now significantly more socialist than anything in Russia or China, just by sheer weight of the quantity of assets commanded by the state. So that's the kind of story. They spotted the gap. They said, we can pretend that there's this political phenomenon called socialism, and it's wonderful for the worker, and we can get the majority of the population to get behind the socialist objective if we market it properly.

24:10 And we'll do it by gradualist means. We'll infiltrate education establishments. We'll infiltrate large corporations. We'll infiltrate charitable organizations and foundations. We'll infiltrate governments. We'll infiltrate NGOs. And we'll gradually proselytize under this new religion of socialism. and when our work is done, it will then be a simple matter. The population will have voluntarily voted for the ownership of the assets by the state and we will never have lost control of the state apparatus. And that is exactly in my mind what has played out over the course of 150 years with remarkable success.

24:54 And to your point about planning, there are plenty of signs of continued intergenerational involvement of the same families of kind of divide and conquer strategies being played out. Different family members are represented in different countries. Different family members looking after different parts of the agenda, different elements of the agenda. and that's been a sort of stable configuration without much perturbation, as I say, for a century and a half and that's why I had that early date. I know very well that bankers were involved when the Dutch basically took over the British crown in the 17th century, 1688 I think it was and I know that the whole idea of the financiers having been behind the Roman Empire's loss of its republic and the gradual reduction in the meaningfulness of the role of the Caesar.

26:04 So, there are ancient historical, let's call them trends or indicators about which you can wrap a million interpretations and stories. But in terms of solid documented history, I think that's where it's all located. Once you go above the level of these families, many people say, oh, there's a hierarchy, there's a cabal. But the evidence base becomes quite thin. You can talk about people wanting such a cabal to be in place and wanting to be in control of that cabal. You can read strange eschatological texts where they have their own set of millenarian fantasies and predictions, prophecies that entail a world very similar to what I've described.

26:57 So those things are all there. I don't deny them. And I'm a very interested listener when it comes to people who have well-researched theories on these. But I kind of have stuck to the areas where there's very strong documentary evidence and where I can walk around in the business community and see evidence of that control structure in place, influence on government, influence on central banks, influence on large corporations, where I can see those, and very importantly, influence on media, where I can speak to the journalists who wrote smear articles about me and they will tell me why. their organization behaves the way it did.

27:38 Yeah I mean it fascinating and depressing at the same time how these things play out You said you were interested in epistemology I am too very interested in epistemology And that why I fell down the Austrian economics rabbit hole a couple of years back and wrote a book on praxeology Because with socialism and, you know, the whole notion of real socialism hasn't been tried. Well, you said real communism hasn't been tried, but real socialism has definitely been tried. Both Karl Menger and Ludwig von Mises laid out very solid a priori proofs of why it doesn't work. And contrary to what most people think, they think it's an incentive problem.

28:21 But when you have a gun to your head, you will work. Like, it's not that people won't work. The bigger problem is economic calculation, which becomes impossible when you have a central planner. So the famous example is from the Soviet Union when the state orders 300 tons of screws and they make like three screws of 100,000 tons each or whatever. I'm exaggerating here, but without the free market, there is no way to signal to producers what people want. And, you know, a common pen or pencil like Milton Friedman's example that can never materialize because you don't let it.

29:04 So what I find more fascinating than whether socialism has been tried or not is that a real interventionist, free capitalist, free market with sound money, that's what has never been tried, like not even remotely. There's always degrees of interventionism. And interventionism is always done by an aggressor like the state or a criminal organization or a psychopath who wants to take other people's shit. And like if we didn't have that, we'll be pretty well off as a species because without aggression, we wouldn't have any of the bad stuff, right? So I'd like to pick your brain on epistemology to begin with here and see where we end up.

29:50 Like, what are your insights and what are your views on Austrian economics and praxeology in general? Yeah, well, I mean, I'll answer that very quickly. So in Austrian economics, I mean, I agree with you. For me, you know, von Mises, von Hayek and Rothbart are the three giants. Friedman, also an important one, as you mentioned. Happy birthday, Rothbard, by the way. He turned 100. He would have turned 100 yesterday. Okay. Now, these guys were, as you said, the analysts of, it's not just of markets, it was of complexity in general, I would say. These were broad enough thinkers that they didn't just confine themselves to thinking of along political theory and economic theory and market theory lines. They were very deep thinkers. And what they were engaging with was complexity.

30:44 You know, the epistemological insight when it comes to dealing with complex systems is there is no potential for analytic solutions to complex problems. There is no way in which you can calculate your way out of complexity. And this has massive ramifications. So what can you do in the face of complexity? Well, the answer there is that instead of using inductive and deductive processes, you use trial and error, conjecture and criticism processes. So you can make a change, a small change on the margin as a certain type of experiment. The origin of that change is never a logical process. It's a creative process and a process of inspiration and intuition.

31:41 So basically, we're using our complex minds in ways that defy logical analysis to propose potential solutions to complexity. And then in a process of trial and error, we identify those ones which we think or suspect are working, and we do more of them. And that's how what I'm describing there is the general framework of evolution. And I'm not referring to biological evolution. Biological evolution would be one subset of the general framework of evolution. And to my mind, it has been proven beyond any reasonable doubt that the only way forward in the face of complexity is by way of evolutionary mechanisms.

32:29 And I think this is very compatible with the thinking not just of von Mises and von Hayek and Rothbart and Friedman, but a great many thinkers in the areas of geopolitics and economics. Just a quick comment on that. A couple of things. First of all, I wouldn't categorize Friedman as the same as the others, because the Chicago school is slightly different because he's not this hardcore, everything has to be a priori in economics. And I'd say the trial and error process and the evolutionary process of economics, I'd call that economic assessment done by individuals to assess the market.

33:10 But I wouldn't call that economics because to me, like my definition and the Austrian definition of economics, it's just a study of what we can and cannot. It's very close to epistemology in that sense. It's all based on all else being equal scenarios and deductive reasoning, and empiricism has nothing to do with it. There's a great section on epistemology in Hans Hermann Hoppe's Economic Science and the Austrian Method, where he points out that the empiricists claim that we cannot know anything to 100% certainty. All we can do is approximate and get closer to the truth, that that statement in itself is an absolutist statement.

33:54 so it cannot be true because you're saying that you know with 100 certainty that we cannot know anything to 100 certainty so how can you be certain of that so it's sort of a gotcha there and and this is why the rationalists view um or um whatever you may call it objectivist uh why a priori knowledge and deductive reasoning uh is more of an appropriate tool for to to come to conclusions about economy and the free market that have to be true, that cannot be argued against without running into a logical contradiction.

34:40 I mean, that's the basis of the whole a priori Austrian method way of thinking, that these things can be proven without evidence. It only requires a set of irrefutable statements or first principles, and then you can draw your conclusions from that. For instance, saying that a minimum wage, with all else being equal, a minimum wage law can never increase people's well-being, because all that will happen is that fewer people will get jobs. In order for those people to get other money, you will have to take it from somewhere else. So it can only do nothing or do worse. it can never do any good.

35:20 So, and you can prove that without any need for evidence. Evidence would not deny nor confirm the thesis more or less because it's reasoned and not, you know, observed. Yes, but what you've done there is reduce a complex system to a simple one with the little phrase you used, Ceteris Paribus, and then logic becomes very compelling and useful for didactic purposes, which is what Austrian economics is about. It's a fantastic story. And yes, I devour it. And yes, I deploy deduction to a great degree when trying to understand it or indeed trying to advance it. So I agree with you there. As far as the sort of assertion of the point about evolution is concerned, the way I prefer to put it is not in that kind of absolute way, but that as a conjecture that I'm prepared to live by.

36:21 And so the conjecture is that any explanation for reality is bound to be replaced by a better one. I mean, that's very interesting because it's sort of in line with the empiricist's claim that Yes. We can only. So, so do you, you don't believe in absolute truths then that there are certain things that we couldn't? No, I believe, I believe in a unitary grounded reality. So there's one reality, but our descriptions being imperfect and only ever getting closer to accurately describing that reality and its full richness and complexity.

37:08 Yeah, I would say that, sorry, but for a praxeological axiom, for instance, like human action is purposeful behavior, you could say that you could refine that by improving the language and having better definitions of the words used in the sentence. But the sentence itself is sort of self-explanatory and kind of very hard to argue against because you need to act with purpose to argue against it. Yes, but then it also invites questions which must be part of your theory like what are the purposes? And that's where I think we can't know what the purposes are because everybody has their own purposes.

37:51 And that's one of the reasons why we can't centrally plan and why we can't allocate resources, why we shouldn't centralize our economies is those purposes are as varied and infinitely malleable. They're changing all the time in ways that we can neither measure. Even the person possessing the purposes doesn't know exactly what they are from time to time. No, but there's no Austrian economics claim. Austrian economics do not claim to know that. Like there is, it admits that we cannot know. One plus one is two is absolutely true. but it's not a description of reality in the sense.

38:34 And I'll give you another one. I'm happy to accept, for example, that I'm sitting in a chair, that this is a chair underneath me. So all of those specific instantiations, I accept they're definitional, that wet stuff is called water. All of those definitional things are right, that water boils at a regular temperature and that it can be defined to be 100 degrees centigrade. and so on, you know, no problem. I'm not like some kind of relativist. And I don't, you know, the claim, and I don't like labels so much. The claim that a philosopher like I would like to make is really one to humility, to being continually on the lookout for better ways to think about aspects of reality.

39:22 And fully, you know, it's a hopeful, it's an optimistic framework where I fully expect that my very best theories about the world will be improved upon by somebody else. And in fact, every now and then you realize if you read a lot, oh, they already have been. I just, I was looking in the wrong place. And I love optimism and hope. I think hope is a rational choice because without it, without it, we are bound to become institutionalized and we are bound to build our own prisons and not escape them. You need hope. Which is, We're bound to be extinct without that. Yeah, yeah, exactly. The will to be free is absolutely necessary for human survival.

40:06 So one of the perspectives I have that gives me great hope and why I don't, when I, you know, at the end of that section, when I described the history of the Anglo-American establishment and its role in the foundation and propagation of socialism, you said that was depressing. I can see why it is because it presents a problem and the problem seems daunting. But one of my philosophical sort of, let's also call it an explanation that I'm prepared to live by, is that overly centralized systems have failure as an inevitability. It's not, you know, no amount of information or data processing capacity or algorithmic complexity can get them away from that problem that centralization is doomed to fail.

40:57 No, I love this. Yeah. And so I think that, sorry, you go. No, I was just going to say, and for that reason, I'm hopeful. and people counter that by saying, yeah, but the amount of destruction that can be caused when they attempt to implement these centralized systems could be immense. I say, yes, it could cause a lot of people to die earlier than they otherwise would have. And I certainly don't applaud that, but that in itself problems are not things to be afraid of Problems are things to be celebrated Life would be in my opinion not worth living without problems problems are what make us tick our creativity would have nothing to do were it not for problems when i say problems i don mean you know they're problems that cause you anxiety and they're problems that just provoke interest so like a mathematics problem or uh the problem of how to make a more beautiful piece of music you know i talk about problems in that non-valent sense i'm not giving it uh an ethical or moral overlay it's just just a thing out there that where that where the world would be improved if we had an explanation for it you know how to topple trillionaire bankers uh from positions of power is a problem and that's worth thinking about and and all problems have solutions they really do at a fundamental level. So those are my beliefs that give me optimism.

42:32 Yeah, and absolutely, I'm on the side of optimism. I just wish that we had fewer problems that are caused by humans shooting themselves in the foot and like the washing machine has broken. We need to fix it. That's a problem I can live with. But as I tell my wife often, you don't need to invent problems you that they will come trust that they will come there is an abundance of problems already and i think like uh a good example of this uh like totalitarian systems not being stable is of course the soviet union but it's also an example of how long people will have to suffer before it crumbles on before it implodes it took like 70 years for for the whole east block to they fucked around for for 70 years and then they finally found out that this doesn't work so that's what i'm afraid of it's not like i view it when a system is based on an ideology of envy and aggression then nothing good can come out of it like aggression is what we want to get away from and if it's okay to take people's stuff regardless of it's via the tax bill or by printing money it is inherently immoral and not desirable so like we have to defend ourselves from that and like that's of course why i fell deep down the bitcoin rabbit hole because all of a sudden there was a a way for a peaceful revolution to exist where you didn't need guns to defend yourselves against aggression you could use clever mathematics to bypass all of these uh a-holes and their their

44:07 ways of expropriating your stuff like that's that's what that's the idea i fell in love with that and and and this number that couldn't be copied allowing for absolute finite thing to exist and even though like i truly believe they exist in our heads mostly it's it's it's a way of communicating that allows us to be sovereign and and not have to worry about what anyone else thinks what we should do with whatever the fruits of our labor but yeah but that's a bit of i got sidetracked here where were we yeah um look i mean the one thing i should mention is that in understanding the the work of von ajak von mrs and rotbart at the level of uh economies and economic systems my personal commercial insight was there was no reason why you couldn't apply that thinking to the corporation it's a deep field um but i built my career on it. I run a private equity fund where our emphasis is on how to exploit the utility of decentralization within the institution of the corporation. And it's been a very stably successful approach. So we do a lot of things differently from typical corporations. And when I say typical, I mean like the 99.999% typical corporation. We're really divergent in important ways. So there are things that are regarded out there in the commercial world as best practice that we regard as complete anathema. And there are ways of doing business which cause other

45:46 practitioners of the private equity trade to clasp their heads and shriek when they hear what we do and how we run things. And when I say it's been stably successful, my last fund had no assets that performed at less than a 27% internal rate of return. And some that performed way above 100%. And they're not sexy businesses in growth industries or anything like that. I haven't got any investments in any of the flavors of the day of the last 10 years, no cannabis investments, no AI investments, no fintech investments.

46:30 I invest in some companies that haven't grown for 10 or 20 years, businesses that have been around since the 1960s, that kind of thing. And our experience is that by altering the governance approach, you change the culture. And when you change the culture, you change the people. And when you change the people, you get more creativity. And when you get more creativity, you get more innovation and that innovation is without limit it can carry on forever and that is an enormous way of a very powerful way of creating wealth so would you say that there's an inherent flaw in hierarchical systems per se or or do you have an example of what you're doing differently here i'm so glad you asked me that question because you know a lot of people who are in our camp, the people who like to be labeled as libertarians or Bitcoin maximalists or whatever, like to think very dichotomously. They don't like to think about optima on a spectrum.

47:35 And there is indeed utility to hierarchy. And there are some people in the, let's call it in the broader church of the Austrian view of the world, who have specialized in explaining how hierarchy can be of great utility. And they're very interesting people to read. The one that comes to mind right now is the economist Ronald Coase, who had the dubious distinction of having to wait the longest from the time he did his work until the day he eventually won his Nobel Prize. It was some stupendously long period, like 50 years or something, ridiculously long period of time. So in his 20s or 30s or something, he comes up with his book on the firm, the market, and the law. And in his dotage, in his late years, he eventually wins the Nobel Prize.

48:33 But I can mention a couple of interesting aspects of his work. I can't go through it exhaustively. That would take many podcasts, but just enough to give people a flavor. So he locates the appropriate use of what we can call hierarchy or corporate institutional structure in things such as the frictional costs of contracting. So because the world is complex, and at the beginning of the year as a business owner, I don't know what I'm going to have to do in order to build value in my firm over the course of the next year. What I do is instead of contracting with Knut to say, look Knut, I want you to do that and that and that. Or I'm going to measure you on the following dimensions. The business owner doesn't know exactly what to measure Knut on or what Knut should do as a result of what we've been talking about earlier. We can't navigate complexity in this analytical fashion. So what he does is he says, Knut, I can't contract with you, but what I'm prepared to do is to offer you a salary and you come and work for me. And this is more or less what we're trying to do. We're trying to, in this marketplace, in some definition of our sphere of influence, which can be geographically and product market and demographically defined, will you come along and help us do this? And I want you to look after this part of the business.

50:04 And so there's an implicit contract that is in place and it displaces the alternative, of which is to contract individually along certain dimensions. And at a low level of fidelity or at a high level of granularity, the frictional costs of that kind of contracting become overwhelming and it becomes easier to deal in the domain of intuition and implicit contracts. There's implicit contracts and intuitions are very tightly bound to the idea of hierarchy, where no reason can be given, where no explanation can be created.

50:52 Then we are dealing in this domain where whether it's bottom-up kind of hierarchy where we choose a leader and we have a person who we follow electively, you know, the leader amongst our friends or the business leader who we most respect and most listen to, whose talks we all go to or whose lunch invitation we all never decline, you know. Whether it's that kind of bottom-up emergent leadership or the top-down leadership, it all results in hierarchy. and as soon as you accept that, you are in the domain of realizing that there is an optimum degree of centralization, that infinite decentralization is as much a fantasy as infinite or extreme. I should say extreme, not infinite. Extreme decentralization is as much a fantasy as extreme centralization. So that's one type. I'm just giving you a flavor by using the employment contract as an example. There's another one. In the domain of human interaction, most of our decisions proceed by unobservable mechanisms in our own heads. So a very small proportion of our decisions and the basis for our decisions is even reducible to words. Most stuff is what we call ineffable. We may not even be aware of ourselves

52:26 making the decisions or selecting the content that we're using to make those decisions. When a good salesperson is sitting in a room in a negotiating setting, his eyes and sense organs and his mind is being bombarded with signals. and he's selecting from those signals and acting by what he says and how he behaves in response to those signals in ways that he will, the moment he walks out the door, be unable to describe to his boss or to his colleagues. He makes innumerable minute decisions, decisions about his posture and his bearing and the expression on his face, whether he's going to be manipulative or transparent, what it that the other person really wants. All sorts of processes are going through his mind and he could never write them down on a piece of paper. And this is the vast majority of human processing and decision-making and where I believe most of the quality actually lies. And I'll give you an example of that in my business of how we use that insight. We believe that it's a complete disaster to have a human resources department in a business. One of the things that human resource departments do is they try to centralize the recruitment process in order to make it fair and compliant with diversity requirements. They don't trust the guy, the line manager,

53:57 the head of the team or whatever to make that decision without his implicit biases emerging. And so they all do the screening. They will look at words on a piece of paper, the person's resume and decide which people are going to be eligible for appointment to a designated role in a designated team. And that first layer of screening is a complete disaster because the first and most important story is the intuition of the team leader. He should be the one looking at the bits of paper and deciding which person he'd like to interview. And he should be the one assessing the fit. That his assessment will be made on the basis of things that can never be written down and is much likely to be to be sound much more likely to be sound than than the dolly bird in the hr department i i absolutely love that i used to believe it or not but i i was once an hr manager in a previous career at a shipping company and i i identify with that so much we would have been better if there was no one there at all like we would have been better off So because I think one of the most misused words in modern media lingo is discrimination.

55:12 It's labeled as a bad thing, but discrimination is the key to everything. Like that's what you do when you employ one person rather than another. It's that you discriminate based on who you think is more fitting for the job. And it's not a bad thing. Yeah, the other thing I wanted to explore here is the like decentralization. I just wanted to offer you my take on the whole notion of this. So I believe there's nothing inherently wrong with hierarchies. I believe they're very useful if they're based on merit. The thing I am against is aggression, like being of anarcho-capitalist roots.

55:54 That is the thing. As soon as there's involuntary enforcement involved in the hierarchy, then it's not a hierarchy that I like. But of course, there's usefulness in centralizing certain things. In Bitcoin, in particular, I think decentralization is super misinterpreted because people think it has to do with everything else, but the important aspect of it being decentralized. So in Bitcoin, I view decentralization as an unfortunate means to a greater end. And that greater end being absolute sound money. So 21 million supply cap that is enforced through decentralization because we cannot trust a human being with a money printer.

56:41 That's why we need the decentralization. It makes the system much slower and much more inefficient than it would have been if we hadn't needed that kind of decentralization. But most people frame the decentralization as the end in itself. And I say, no, we need decentralization here, unfortunately, so we can have sound money. And when we have sound money and money that the state cannot take, and it's very hard for a burglar to take if they don't know that it's there, then we can achieve decentralization in everything else. Then we reach the sovereign individual thesis and then people. So decentralization in Bitcoin is unfortunate, but it can, through sound money, lead to the fortunate version of decentralization in the rest of society.

57:25 And also when you have this world where you don't have any state interventionism or taxes, if you think of that as the utopian vision of everyone being in charge of their own money, then a company is not a legal entity or whatnot. And you don't need accounting. It's just a group of people doing things. That's what it is. And you can divide the plunder. You can even program it to be divided fairly amongst. But it doesn't have to be anything but a signal group. And there are businesses in Bitcoin operating that way already. Like you often have one foot in the legacy world and one foot in the new world where you don't need all the other stuff because it's permissionless.

58:11 You can just do things. So that's the beauty of it. Yeah. Thoughts? Now, that's very interesting. And I'm going to, with your permission, put forward a surprising idea. I think it'll be surprising to you and to your listeners. and see whether you can spot the similarity between the logical framework you've just described and what I'm going to, the assertion or the conjecture I'm going to make. The conjecture is quite simple, that the world would be better off without stock markets. Okay. And let me explain why I think this is the case. Fragmentation of ownership is not neutral.

58:54 Can you accept that point? The moment ownership of a complex asset becomes too disseminated, too fragmented, nobody cares about the asset. Nobody is a custodian. It's not worth your time to guide that organization properly. And you may say, well, that's easy. I spot the trick here because Nick is a private equity investor and he likes to control businesses. He likes to have at least negative control. You know, 25 up to even 80% of a business is good for me. But what I observe in the real world time and time again is that the businesses that have concentrated ownership are much better stewards of society's resources than the businesses that have diverse ownership.

59:48 and that is yet another insight that I get to put into practice in wealth creating fashion every year. You know, our favorite type of transaction is to do what? To buy a division from a listed company because it is like shooting fish in a barrel. You initially, all you have to do is stop doing the stupid stuff and then you're already making lots of money and then you start doing the smart stuff and you make even more money. And that stuff is very beneficial to everybody in the ecosystem. So, for example, over a period where we have doubled profit per employee, which is the period starting 2016, over that time, we have doubled real profit per employee across our portfolio. We've also grown employment by 150%. So, they're two and a half times as many people working for the businesses we look after, even though we've increased the profit per employee by a factor of two.

1:00:48 I promise you we haven't been cutting salaries. I've never done that analysis, but it's quite a tricky one to do, and it's just not worth the effort because I know that the answer is, yeah, the salaries have been going up a little bit above inflation. Now, so what's going on there? Why is this the case? Why does fragmented ownership matter? Well, yeah. Can I attempt to dissect it? Because I find it endlessly fascinating. So, yes. First of all, the disclaimer here is like we have to talk about the stock market on an absolutely free market. We cannot talk about the current stock market where there's interventionism everywhere and artificial interest rates and so on and so forth.

1:01:29 So let's rewind the clock to the East India company in Europe before central banks. Everything is on a gold standard. And this is sort of where the stock market starts, right? because all the ship owners realize that they're taking a huge risk if one of their ships sinks, they're out of business. So instead, they form a cabal and they share that risk among one another so that if one ship sinks, it hurts everyone equal. So why would that be a bad thing? Well, the answer to that would be that you are no longer incentivized to care about your specific ship as much as you were had you not collectivized the losses.

1:02:17 So this is sort of like the start of centralizing profits and collectivizing losses, right? It's basically an insurance scam because you can even, you have the opposite incentive actually. you have an incentive to make your ship as cheap and to get away with your ship being not as secure or safe as the other ship owners ships because then they have to spend more money and you spend less so therefore because you know that you you won't be that hurt by one ship sinking even if it's your ship. In fact, there's... So yes, I do buy that thesis.

1:02:57 I do buy that. It's a bit of like, there's some collectivist trap there in one way, shape or form. And it also reminds me of this Friedman-ish, how many fucks you give about your money. If you're spending your money on yourself, you worried about both quality and price Spend your money on someone else You more worried about price and quality spend other people other people money on yourself you prioritize quality over it and if you're the state you're spending other people's money on other people and then you don't give a shit about anything so like there's there's an aspect of that too so i think the more absolute the ownership which is also by the way why i don't buy this whole nft crap that you can own art and then send a portion of when you sell it goes to the artist and all of that that's all bullshit to me because if i buy something i don't want anyone else not even the artist to have a portion of it i want absolute ownership because that's where i take full responsibility for it and that's when it's actually mine and yeah i think this this ties in very well to the whole bitcoin narrative here if you view bitcoin as the only thing that you can actually 100 percent own which is not true for you know a villa that you have to pay property tax on for instance that you don't actually own that you own it by permission from the state and you you have to pay your captors every so so yeah i i do understand that i'd buy that the the world would be better without the stock market there there would have to be but then again the stock market wouldn't

1:04:31 Yeah, yeah. Anyway, because I agree with your point about the benefits of sharing certain outcomes, which is really a point about diversification is good. But the benefits of diversification in most settings run out very quickly. So in my business, eight portfolio companies is more than enough diversification. And there are eight companies in a single geographic area. how much of my personal wealth do i place outside of that not much really because i look around the world and i say in no ways am i investing in shares at those prices or government bonds at those prices i'd like real property i'd like to own some trees somewhere um and uh you know that that kind of real asset is stuff i'll buy i don't i don't like to have my money for the long term in things that don't produce income, you know, commodities and things like that.

1:05:30 From time to time, they're just safe havens compared to the overpriceness of everything else. But the benefits of diversification in most settings run out very quickly. And so, yes, I can see how for a very large corporation, it might be beneficial to have 10 or 20 owners, but not 10,000, not 100,000. That doesn't help at all. And you would, I think I would say also you want the person who's the biggest owner to be overexposed in his personal capacity to that company because then you get the alignment of interest and the minority shareholders all benefit. So to me, it's not just the fragmentation of ownership that's harmful from a custodial point of view.

1:06:16 You see how I use that word. I see myself as a custodian of assets. are not there to strip them or to squeeze them for cash or to make them more efficient. I never use this term efficient. Efficiency is a bloody stupid idea most of the time. But there's that aspect of the fragmentation of ownership. But there's also an aspect of things changing hands too fast. You know, that is just the only people who that suits are criminals, People who have found a way to pull off little shavings of your value each time the thing changes hands.

1:06:56 But this is what's wrong with John Maynard Keynes' idea of velocity of money. This is the big scam. The theory is that every time a $100 bill changes hands, you produce $100 worth of value. But that's only true if there's no inflation. Because otherwise, that's not $100. It's $98 and then $96. and then like it shrinks. So, and there's also the wrong type of shit is being produced. It's over consumist, like throw away quantity over quality products. And if you have sound money, it's quality. Yeah. Before you know it, you've got somebody being paid to dig holes and fill them back up again. No, yeah, exactly. It's like a junkie being like getting the next hit, which might feel good in short term, but you'll have to pay the price later on.

1:07:43 So it's a monetary junkie behavior, I'd say. Yeah. So to the extent that I believe there, because I am talking again in the world of a spectrum and an optimum on the spectrum, I'm not an extremist kind of guy. I just sound like a lunatic when I say things like we should shut down the stock market. To the extent that I believe we do need government at a local level, how would I like to experiment with levying taxation? I would like to do it by way of a transaction tax. So only VAT and nothing else? My dad liked that idea.

1:08:24 Not even just on sales. So like what I'm saying is you have a very small tax that's based on transacting. And so if you sold a share, that tax would apply. And it wouldn't have to be a big one, just a tiny little one. Slow all the transactions down. I absolutely failed to see how that would result in economic contraction. You're so close to just describing Bitcoin. You know that, right? Because Bitcoin has a transaction fee and it's super small and it gives money to the people securing the network, which is the miners. The miners do not create the Bitcoins, by the way.

1:09:06 they get employed by the users to, and they get paid in Bitcoins for the work they do, right? So the dynamic is different than what people think it is. No, yeah, it makes sense if you frame it like that. And I'd say there are so many parallels to what I already see in Bitcoin with all of these things that you're saying. For instance, the ownership, as soon as you divide ownership, it gets diluted what every single owner thinks about the thing he owns. Like the responsibility is reduced accordingly. So in Bitcoin, it's very hard to share custody. You can do it in multi-sig solutions and whatnot, pretty tricky technical solutions to it.

1:09:51 But for the most part, if you know the private key, you own the assets. So there's no difference between knowing and owning or knowing and possessing. It's like a layer. If you have ownership on top, it's a legal... legal relationship between you and a thing. Possession is physical. You physically hold the thing. But in Bitcoin, it's yet one level deeper still because the knowledge is the ownership. So in that sense, it's the only thing you can actually own to that extent. And that's also another aspect of it I fell in love with. And it's so funny when you talk about these things and your insights about how companies should be run and decentralization and hierarchies and stuff, because I see so many parallels.

1:10:42 So you're basically describing the system where we're trying to materialize here. I really enjoy this discussion for that reason. Like you, I'm seeing all these parallels and it's quite weird. Like I'm coming from a very conventional, unconventional private equity world but it an old economy kind of idea and you coming from the angle of the cryptocurrency or a blockchain and and their conclusions that we arrived specifically specifically bitcoin like that's also one of the insights that that's why i say that decentralization is an unfortunate means to a greater end and that and being this 21 million all the others are just cheap copycats of that and cannot work in the norm yeah i must tell you that when the Bitcoin phenomenon began to be a thing, I started thinking a lot harder about money and I started reading a lot more about money. And there was a time when I thought I understood money well enough to explain it to other people. But that time has long gone.

1:11:48 The more I think about money, the more I realize that I'm an explanation or several explanations away from possessing what I would describe as an understanding adequate for the purposes of teaching somebody else. I find myself repeatedly stymied by some of the critical features of money as I see it, or let's not call them critical, let's call them key features of money. And so I retain a sense of great humility when it comes to discussions about Bitcoin, indeed other cryptocurrencies, about central bank digital currencies, about fiat currencies, about commodity-based currencies. I don't have a set of answers which I regard as a sort of framework I'd like to put forward. But at the same time, I have a sense that There is such a set.

1:12:54 And Bitcoin, I would regard as a candidate explanation or, sorry, not candidate. Bitcoin is an explanation and destined to be replaced by a better one for intrinsic reasons to the nature of explanations. That's not a criticism of Bitcoin, by the way. that i'm as i say intellectually i don't feel i have had those flashes of insight required to to get me to the point of being able to look you in the eye and tell you i understand and this is what we should do and here's a suggestion and that kind of thing i'm just not there it's so sad i find that very honorable of you to to admit that to take the humble approach. I see that all too seldomly in the world today that people just say that I'm not knowledgeable about this. I shouldn't have an opinion on it. It's very rare. For me, just to wrap this part of the discussion up a bit here, for me, it sort of clicked when I stopped seeing store of value and medium of change as two different things.

1:14:08 nowadays i see it as medium of exchange over time and space so it's four-dimensional medium of exchange over time when you trade with your future self and over space when you trade with other people for me that was it's just a like to tell you what what what made it simpler for me to explain it to other people i'm going to remember that sound right because a person who's thought deeply about things and gives that sort of subtly different uh framing that's often the key to spur creative thought in somebody else because you get locked in the tiredness of ideas otherwise. You know, and I have read some Bitcoin books, Safidian Amos.

1:14:50 Safidian Amos, yeah. But that was actually one of the books which caused me to realize, I was about to say to understand money less, but that's terribly unfair. It caused me to realize that that book didn't contain what I needed to know, but it did shine a light on me needing to know something else. Yeah, it was a great book for me too, because it sent me down the whole Rothbard Mises rabbit hole as well. There's so many references to that. I've forgotten that he even referenced them. You know, that's funny. Because they were so familiar to me already. Yeah. Yeah. No, it's a really interesting space. And I think, you know, people ask, what would you most like to know?

1:15:34 You know, what did you like? Where would you like your knowledge to be filled in? And they would expect me to say, oh, I'd like to know who rules the world, you know? I think more than that, I would like to understand money. Yeah, and that is, it is a deep, deep topic because the word has changed meaning so many times. I mean, when we think of money today, we think of fiat currency, which is not money, but we refer to it as money. but it's very far from anything just or fair since they can print more of it and conjure it out of thin air. Okay, here's a little mind game that I play when I do try and think about money, which I do often.

1:16:17 I often try to think about money. But a mind game that I play, it's interesting that we use the term fiat only when the fiat, you know, Latin word for doing or making, is only when the fiat is... Sorry? By decree, I believe, is the one translation. Yes, let it be. It's, I think, a subjunctive. Latin is now a little bit stale, but it's sort of let it be. It's only when the state is decreeing that we call it fiat money, but in all other instances, individuals are decreeing when they use money. So there's always a fiat aspect to money in the literal sense of the word, in the sense that one of the important components of any monetary system is that it be recognized.

1:17:11 Yeah, absolutely. Whether it's recognized by government or recognized by individuals, somebody has to do the recognizing. So the question is, what is it that we recognize? Yeah. And I think that the recognize that's the six properties of money are fungibility, scarcity, divisibility. I'm a bit too long into the conversation. Can't be fake. Yeah. All sorts of, there are these six aspects anyway. Yeah. Yeah. And the sixth one is acceptability. and I think acceptability is really a product of all the others.

1:17:55 So you have to have the others first before you can't just say that, well, you can point guns at people and say you have to pay your taxes in nation excess currency and that's one way of getting acceptability. But natural acceptability, like what's the case with gold, for instance, the free market figured out that gold had very suitable properties for being money all by itself. So, yeah, and so I wouldn't say that gold is by decree, since it's an asset found in the Earth's crust. And I wouldn't categorize Bitcoin as that either, since I would categorize that there are ways of seeing Bitcoin as like an informational element on the periodic table without protons or neutrons.

1:18:38 It's just basically electrons, but it still acts as if it was an element. so yeah maybe a bit far but anyway no no it interesting with seven minutes to go I mean just the one observation I would make is that it exactly in that listing of the elements of money that I find conversations get very interesting very fast because people have different lists Many critics of Bitcoin would say, oh, but you guys always drop out the stability of monetary value. To which a Bitcoiner will say, well, how can you use the term monetary in that sentence? Because the Bitcoin is worth one Bitcoin.

1:19:19 What are we talking about? But criticism is that yesterday I was able to pay for two children's school fees and today I can only pay for one. You know, that's not a stable value. the criticism we would give there is that the whole notion of stability is a lie like that's how they fool us into paying more and more for everything every year while we it seems like we're paying the same but the productivity of the human race is going up and still prices aren't falling so like the the the nature of the free market is deflation like the that's the natural state And if you think about it from first principles, it's super simple.

1:20:00 Like if a human being practices doing something, do they get better or worse at doing the thing they're practicing? Like, of course, we get better at stuff. So the follow up question to that should be, so why aren't all prices falling forever? And if you denominate in Bitcoin and zoom out long enough, you can see that they actually are falling. Like my house is worth way fewer Bitcoin this year than 10 years ago. But you have to have a very zoomed out lens. For a while in my younger days, I'm talking in my sort of 20s to early 30s, I would be a guest lecturer in economics, in various segments of economics.

1:20:42 and I used to start probably something close to all my lectures reminding people that everything that is worth saying about an economy starts with a simple picture of a factory and a household and that everything else that goes on in between is what we call intermediation and what we're interested in is how the household and the factory are able to interact and what they are competent and able to do. So all the stock markets and all the bits of paper and all the contracts are configurations of the institutional structure relating the household to the factory. And I found that the reason I always used to do that is the discipline of starting there had always been so useful to me in order to determine what was bullshit and what was not, that I wanted to impress it. And years later, I still get people coming to me saying, you know, I remember that time you put on the whiteboard that simple drawing and then spoke about it for 45 minutes. People don't forget that. And I'm not talking about people who became professional economists. I'm talking about people who were like maybe 10 years younger than me studying economics and going out into the South African business world, you know, and then you run into them and they remember who you are or whatever. Now they've seen you on a podcast or something.

1:22:06 And I was taught by that guy, you know. But it's very, very often in that I get that feedback. And so for me, what I've noted is in some Bitcoin enthusiasts, first of all, a propensity to say totally absurd economic things and a failure to link back to the real economy often enough in their thinking. I'm not accusing you of that. I found our conversation very orderly and interesting. But it is a problem and a phenomenon. I've kind of been invited to Bitcoin conferences and I say, there are too many of those crazy guys. I've gone to one or two of them.

1:22:47 I know. It's very hard. You've got to weed through all these absolute hooligans who say like the most foolish things yeah i just don't my life's too short for that so i don't go i try to find individuals and have lunch with them and and and ask them a bunch of questions like i want to come and have lunch with you in spain and and then if you're asking the questions i ask the questions because uh you know i i have this yearning to to have a more developed sense of money fantastic i mean yeah and if you if you widen that to the broader crypto space you get even more economic illiteracy i say but but it's very prevalent within within the bitcoin community as well i see bad takes every single day and and it's a horrible takes to be honest yeah there's there's a there's a fundamental one that you might enjoy that i realized the other day uh you know central bankers banned you about this term programmable central bank digital currency yeah straight away that thing is not money because the moment you make a unit programmable it becomes non-fungible exactly and it's programmable people that's what it is, that's the end goal and that's what they're trying to do, they're trying to program us. Like, why else would you want money to be programmable? Like, I don't buy that at all.

1:24:17 And like, that's what we're reacting against. Trying to program business as well, operating through the Basel framework. If I see signs of it emerging in the South African banking world right now, and I'm pointing it out to the bank, because I'm saying, you're only doing this because of Basel 3.5. Think about how crazy that is. we must resist that with everything we got because that's uh that's the social credit score score on on steroids it will it will nibble away at your freedoms until you have a constant booth constantly stomping on your head that's what that is 100 you know this whole story the whole focus on digital id and and individual social credit i believe is a big distraction advice the time bomb the major threat is the Bank for International Settlements and the Basel framework we are running out of time unfortunately well thank you very much for your time so far been great conversations likewise great to get to know you Nick and before we leave where can people find you is there anywhere on the internet you want to send them of course pandata.org but other than that where can they find me a good place to find me is on twitter nick or on sub stack the handle is the same it's at nick hudson as spelt on the screen at nick hudson ct for cape town and depending on uh what i'm talking about at any particular time i may or may not be search banned so you might have to be very precise in typing that out otherwise you will find those

1:25:51 horrible replica accounts you know the what do you call them the counterfeit accounts that have my picture and my background and talk some shit about whatever the time the day is so you got to be very careful there are no underscores there are no spaces it's at nickhudsonct and the same on substack where i write infrequently and and and repost occasionally so you don't get bombarded by nonsense um and i with anybody who i follow back there the gms are open and that's a good place to contact me as well. Fantastic. So with that, thank you very much for coming, Nick. And this has been the Bitcoin Infinity Show. Thanks for listening. Brush your teeth. Bye-bye.